Mullen Automotive (NASDAQ:MULN) stock has fallen about 50% during the past month and an interview of CEO David Michery by Fox Business host Charles Payne isn’t appearing to help the case.
The interview starts off with Payne asking Michery about Mullen’s recent lawsuit against several broker-dealers and John Doe defendants. Christian Attar Senior Partner Wes Christian was also present at the interview and alleged that the defendants “illegally violated Rule 15 c3-3, which is the customer protection rule, as well as Rule 14 B-1, both of which stem out of them […] short selling shares illegally by not having a proper borrow. Why? Because they were using customers accounts which violates Rule 15 c3-3.”
Payne then went on to share a comment from Charles Schwab (NYSE:SCHW), which stated that the lawsuit “spins an outlandish conspiracy theory” that blames it for MULN stock’s poor performance.
MULN Stock: Charles Payne Hosts David Michery Interview
However, the interview took a turn after Payne questioned Michery about his salary and Mullen’s losses and general and administrative (G&A) spending. Last quarter, the electric vehicle (EV) company reported $31.77 million of G&A expenses.
“People are saying you’ve taken a lot of money, you’ve paid yourself a lot of money, and this kind of spending it just doesn’t make sense for a small company like yours,” said Payne.
Michery responded that bringing a vehicle to market is very expensive, to which Payne quipped back that those expenses belong in research and development (R&D). Michery then brought up awards and compensation and then stopped talking. Payne explained that audio issues interfered with Michery’s response, concluding the interview.
Afterwards, Mullen released a press release to address the question. In the release, the company states that it spent $46.1 million in operating expenses for the recent quarter, which does not include non-cash expenses such as $4.1 million in stock-based compensation (SBC).
“If you compare our operating cash flows to our competitors, you will see that we operate very efficiently. Mullen also has a strong balance sheet with $352 million in stockholders’ equity, $560 million in total assets and total notes payable of only $7.3 million,” said Mullen.
The competitors that Mullen compares itself to in the release are Canoo (NASDAQ:GOEV), Nikola (NASDAQ:NKLA) and Workhorse (NASDAQ:WKHS). This isn’t exactly a compelling comparison, as all three companies have lost at least 50% of their value so far this year. Overall, the written response seems quite dodgy, as Mullen does not directly answer why it has $31.77 million in G&A expenses.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
